Smart Money Move: How to Get Loan Against Mutual Funds

Running short on funds but don’t want to sell your investments? You can now get a loan against mutual funds easily and quickly. It’s a smart way to unlock liquidity without redeeming your mutual fund units. This article will explain how to get loan against mutual funds and guide you step-by-step through the process.

What is a Loan Against Mutual Funds?

A loan against mutual fund is a type of secured loan where you pledge your mutual fund units as collateral to a bank or non-banking financial company (NBFC). In return, you receive a certain percentage of the fund’s value as a loan, typically ranging between 50% and 80%, depending on the type of mutual fund.

Why Take a Loan Against a Mutual Fund?

Before learning how to take loan against mutual fund, it’s helpful to understand its benefits:

• No need to redeem your investments
  
  

• Lower interest rates than unsecured loans
  
  

• Quick disbursal – often within 24-48 hours
  
  

• Minimal paperwork and online process
  
  

• Retain ownership while your investment keeps growing

How to Get Loan Against Mutual Funds: Step-by-Step Guide

Wondering exactly how to get loan against mutual funds? Follow these easy steps:

1. Choose a Suitable Lender

Many banks and NBFCs like HDFC Bank, ICICI Bank, and Bajaj Finserv offer loans against mutual funds. Compare interest rates and processing fees before choosing.

2. Check Your Eligibility

You must be the primary holder of the mutual fund. Joint holders may need to submit additional documentation.

3. Gather Required Documents

To take loan against mutual fund, you’ll typically need:

• PAN Card
  
  

• Aadhaar Card
  
  

• Mutual fund statement
  
  

• Bank details

4. Select Funds to Pledge

Both equity and debt mutual funds are eligible. Debt funds often get higher loan amounts due to lower market volatility.

5. Pledge Your Funds and Sign Agreement

The lender marks a lien on the selected units. Once you sign the agreement, the lien is registered with the mutual fund house.

6. Loan Disbursement

Once approved, the loan amount is credited to your account or provided as an overdraft.

How to Take Loan Against Mutual Fund Online?

Many lenders now offer 100% digital processes. Here’s how:

1. Visit the lender’s official portal
   
   

2. Log in with your PAN or folio number
   
   

3. Select mutual funds to pledge
   
   

4. E-sign the agreement
   
   

5. Get funds in your account within hours

Final Thoughts

If you're looking for immediate funds without disturbing your investment portfolio, it’s smart to get loan against mutual funds. With a fast, secure, and paperless process, you can meet urgent financial needs without compromise. Now that you know how to take loan against mutual fund, use it wisely to manage emergencies or business opportunities with ease.